india - healthcare
TRANSCRIPT
Healthcare:Reaching out to the masses
PanIIT Conclave 2010
kpmg.com/in
Over the last few decades, there has
been a tremendous improvement in
the quality of healthcare services in
India. This is illustrated by the
significant improvement in healthcare
indicators such as life expectancy at
birth, infant mortality rates, maternal
mortality rate, etc. over this period.
The improvement in the healthcare indicators is a direct result of the improved penetration of healthcare services in terms of the increase in the number of government and private hospitals in India. There is a noted increase in the number of allopathic doctors with recognized medical qualifications, who have registered with state medical councils.
It has been observed that there is a In spite of this significant development, widespread effort to improve the considerable gaps continue to exist in accessibility of healthcare amenities to the demand for and supply of quality India rates poorly on even the basic every strata of society. The fact that a healthcare. This paper highlights these healthcare indicators when major part of India is rural cannot be gaps through: benchmarked against not just the ignored and indispensable services I. International benchmarking developed economies, but also against such as healthcare need to be made the other BRIC nations. This can be II. Identifying the urban – semi-urban available to all. attributed to the poor healthcare and rural disparity
infrastructure reflected in the low bed III. Identifying the inter-state disparity.
density ratio, low doctor density ratio, and poor healthcare spending.
Demand and supply analysis I: International benchmarking
IntroductionCurrent state of healthcare in India
Life expectancy at birth (years)
1990 2008
Male Female Male Female
57 58 63 66
Infant mortality rate 1994 2008
Per 1000 live births 74 53
Source: World Health Statistics 2010
Source: National Health Profile 2009
Maternal mortality ratio 1999-01 2004-06
Per 100000 live-births 327 254
Source: National Health Profile 2009
Number of Physicians (Allopathic)
2005 2006 2007 2008 2009
660856 682080 708043 736743 757377
Source: National Health Profile 2009
Developed Economies Emerging Economies
Indicator Year India US UK Japan Brazil Russia China
Life expectancy at birth (years) 2008 64 78 80 83 73 68 74
Infant mortality rate (probability of dying by age 1 per 1000 live births) 2008 52 7 5 3 18 9 18
Maternal mortality rate (per 100000 births) 2000-09 254 13 7 3 77 24 34
Hospital bed density (per 10000 population) 2000-09 9 31 39 139 24 97 30
Doctor density (per 10000 population) 2000-09 6 27 21 21 17 43 14
Births attended by skilled health personnel (percent) 2000-08 47 99 NA 100 97 100 98
Source: World Health Statistics – 2010
© 2010 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
© 2010 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
1 2
Over the last few decades, there has
been a tremendous improvement in
the quality of healthcare services in
India. This is illustrated by the
significant improvement in healthcare
indicators such as life expectancy at
birth, infant mortality rates, maternal
mortality rate, etc. over this period.
The improvement in the healthcare indicators is a direct result of the improved penetration of healthcare services in terms of the increase in the number of government and private hospitals in India. There is a noted increase in the number of allopathic doctors with recognized medical qualifications, who have registered with state medical councils.
It has been observed that there is a In spite of this significant development, widespread effort to improve the considerable gaps continue to exist in accessibility of healthcare amenities to the demand for and supply of quality India rates poorly on even the basic every strata of society. The fact that a healthcare. This paper highlights these healthcare indicators when major part of India is rural cannot be gaps through: benchmarked against not just the ignored and indispensable services I. International benchmarking developed economies, but also against such as healthcare need to be made the other BRIC nations. This can be II. Identifying the urban – semi-urban available to all. attributed to the poor healthcare and rural disparity
infrastructure reflected in the low bed III. Identifying the inter-state disparity.
density ratio, low doctor density ratio, and poor healthcare spending.
Demand and supply analysis I: International benchmarking
IntroductionCurrent state of healthcare in India
Life expectancy at birth (years)
1990 2008
Male Female Male Female
57 58 63 66
Infant mortality rate 1994 2008
Per 1000 live births 74 53
Source: World Health Statistics 2010
Source: National Health Profile 2009
Maternal mortality ratio 1999-01 2004-06
Per 100000 live-births 327 254
Source: National Health Profile 2009
Number of Physicians (Allopathic)
2005 2006 2007 2008 2009
660856 682080 708043 736743 757377
Source: National Health Profile 2009
Developed Economies Emerging Economies
Indicator Year India US UK Japan Brazil Russia China
Life expectancy at birth (years) 2008 64 78 80 83 73 68 74
Infant mortality rate (probability of dying by age 1 per 1000 live births) 2008 52 7 5 3 18 9 18
Maternal mortality rate (per 100000 births) 2000-09 254 13 7 3 77 24 34
Hospital bed density (per 10000 population) 2000-09 9 31 39 139 24 97 30
Doctor density (per 10000 population) 2000-09 6 27 21 21 17 43 14
Births attended by skilled health personnel (percent) 2000-08 47 99 NA 100 97 100 98
Source: World Health Statistics – 2010
© 2010 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
© 2010 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
1 2
India is facing a serious challenge in Further, a major fraction of the Indian matching the supply of healthcare population lacks access to even basic resources with the growing demand on amenities such as clean water and account of population growth, sanitation.improving socio-economic drivers, and the increasing disease burden of lifestyle diseases.
Healthcare penetration has for a long Some other alarming facts about status The primary reasons for under-time been concentrated in urban areas, of healthcare infrastructure in rural developed infrastructure in the semi-
3particularly in metropolitan cities such areas vis-à-vis urban areas are: urban and rural areas are the lack of as Mumbai, Delhi, Chennai and Kolkata investment incentives for private sector • Rural doctors to population ratio is and other Tier I cities. investment, inefficiencies in the public lower by six times
healthcare system and lack of a quality • Rural beds to population ratio is While 70 percent of the Indian human resource pool and supply and lower by 15 timespopulation lives in semi-urban and rural distribution infrastructure. • Seven out of ten medicines in rural areas, 80 percent of the healthcare areas are substandard / counterfeit
1infrastructure is built in urban areas . • Sixty six percent of the rural For instance, there are 369,351 population lack access to critical government beds in urban areas and a medicine
2mere 143,069 beds in rural areas . • Thirty one percent of the rural population travels for over 30 kilometers for medical treatment.
Hence, the National Rural Health ease the burden of tertiary care centers living in slums characterized by 4Mission was initiated in 2005 in order in the cities by providing equipment overcrowding, poor hygiene and
to resolve the issues of accessibility and training primary care physicians in sanitation and the absence of civic 7and affordability of healthcare to the basic surgeries. services .
population below the poverty line and the lower and middle classes, in rural The government of India is also India. The primary focus of this initiative providing a five-year tax holiday for new is on 18 states that have low public hospitals (in Tier II and III towns) health indicators and/or inadequate commissioned in the period April 2008 infrastructure. These include Arunachal to March 2013, in the Union Budget Pradesh, Assam, Bihar, Chhattisgarh, 2008-09, in order to boost investment
6Himachal Pradesh, Jharkhand, Jammu in this sector . & Kashmir, Manipur, Mizoram, Meghalaya, Madhya Pradesh, Nagaland, The National Urban Health Mission Orissa, Rajasthan, Sikkim, Tripura, focuses on the healthcare needs of the
5Uttaranchal and Uttar Pradesh . Through urban poor, particularly the slum the Mission, the government is working dwellers in urban areas. Nearly one-to increase the capabilities of primary third of India’s urban population (~100 medical facilities in rural areas, and million people) are estimated to be
Developed Economies Emerging Economies
Indicator Year India US UK Japan Brazil Russia China
Population using improved sanitation (percent) 2008 31 100 100 100 80 87 55
Source: World Health Statistics – 2010
Indicator (2007) Rural Urban
Crude death rate 8.0 6.0
Infant mortality rate 61.0 37.0
Neo-natal mortality rate 40.0 22.0
Post-natal mortality rate 20.0 16.0
Peri-natal mortality rate 41.0 24.0
Still birth rate 9.0 8.0
Demand and supply analysis II: Urban – semi-urban and rural disparity
The following table highlights the disparity in healthcare indicators between the rural and urban population.
This can be attributed to the lack of uniformity in healthcare resources available in rural and urban India. This has also been dragging down the overall India average.
1 Vaatsalya Hospitals, http://vaatsalya.com/2009/
2 National Health Profile 2009
3 Healthcare in Rural India: Challenges, Rural Technology & Business Incubator, IITM, Chennai, March 2008
4 Ministry of Health and Family Welfare
5 NRHM Document 2009 on Rural Healthcare System in India
6 Union Budget 2008-09
7 Urban Health Resource Center
Source: National Health Profile 2009
Rural areas also suffer from the lack of basic amenities such as electricity, appropriate drainage and sewage, etc., which further contribute to poor hygiene and increased susceptibility to diseases.
Although there have been various government initiatives to supply healthcare amenities to the rural population and also the slum dwelling urban population, these efforts are clearly not sufficient.
Distribution of households having safe drinking water facilities in India (percent)
1991 2001
Rural Urban Rural Urban
55.54 81.38 73.2 90
Source: National Health Profile 2009
Distribution of households having electricity in India 2001 (percent)
2001
Rural Urban Total
43.53 87.58 55.85
Source: National Health Profile 2009
© 2010 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
© 2010 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
3 4
India is facing a serious challenge in Further, a major fraction of the Indian matching the supply of healthcare population lacks access to even basic resources with the growing demand on amenities such as clean water and account of population growth, sanitation.improving socio-economic drivers, and the increasing disease burden of lifestyle diseases.
Healthcare penetration has for a long Some other alarming facts about status The primary reasons for under-time been concentrated in urban areas, of healthcare infrastructure in rural developed infrastructure in the semi-
3particularly in metropolitan cities such areas vis-à-vis urban areas are: urban and rural areas are the lack of as Mumbai, Delhi, Chennai and Kolkata investment incentives for private sector • Rural doctors to population ratio is and other Tier I cities. investment, inefficiencies in the public lower by six times
healthcare system and lack of a quality • Rural beds to population ratio is While 70 percent of the Indian human resource pool and supply and lower by 15 timespopulation lives in semi-urban and rural distribution infrastructure. • Seven out of ten medicines in rural areas, 80 percent of the healthcare areas are substandard / counterfeit
1infrastructure is built in urban areas . • Sixty six percent of the rural For instance, there are 369,351 population lack access to critical government beds in urban areas and a medicine
2mere 143,069 beds in rural areas . • Thirty one percent of the rural population travels for over 30 kilometers for medical treatment.
Hence, the National Rural Health ease the burden of tertiary care centers living in slums characterized by 4Mission was initiated in 2005 in order in the cities by providing equipment overcrowding, poor hygiene and
to resolve the issues of accessibility and training primary care physicians in sanitation and the absence of civic 7and affordability of healthcare to the basic surgeries. services .
population below the poverty line and the lower and middle classes, in rural The government of India is also India. The primary focus of this initiative providing a five-year tax holiday for new is on 18 states that have low public hospitals (in Tier II and III towns) health indicators and/or inadequate commissioned in the period April 2008 infrastructure. These include Arunachal to March 2013, in the Union Budget Pradesh, Assam, Bihar, Chhattisgarh, 2008-09, in order to boost investment
6Himachal Pradesh, Jharkhand, Jammu in this sector . & Kashmir, Manipur, Mizoram, Meghalaya, Madhya Pradesh, Nagaland, The National Urban Health Mission Orissa, Rajasthan, Sikkim, Tripura, focuses on the healthcare needs of the
5Uttaranchal and Uttar Pradesh . Through urban poor, particularly the slum the Mission, the government is working dwellers in urban areas. Nearly one-to increase the capabilities of primary third of India’s urban population (~100 medical facilities in rural areas, and million people) are estimated to be
Developed Economies Emerging Economies
Indicator Year India US UK Japan Brazil Russia China
Population using improved sanitation (percent) 2008 31 100 100 100 80 87 55
Source: World Health Statistics – 2010
Indicator (2007) Rural Urban
Crude death rate 8.0 6.0
Infant mortality rate 61.0 37.0
Neo-natal mortality rate 40.0 22.0
Post-natal mortality rate 20.0 16.0
Peri-natal mortality rate 41.0 24.0
Still birth rate 9.0 8.0
Demand and supply analysis II: Urban – semi-urban and rural disparity
The following table highlights the disparity in healthcare indicators between the rural and urban population.
This can be attributed to the lack of uniformity in healthcare resources available in rural and urban India. This has also been dragging down the overall India average.
1 Vaatsalya Hospitals, http://vaatsalya.com/2009/
2 National Health Profile 2009
3 Healthcare in Rural India: Challenges, Rural Technology & Business Incubator, IITM, Chennai, March 2008
4 Ministry of Health and Family Welfare
5 NRHM Document 2009 on Rural Healthcare System in India
6 Union Budget 2008-09
7 Urban Health Resource Center
Source: National Health Profile 2009
Rural areas also suffer from the lack of basic amenities such as electricity, appropriate drainage and sewage, etc., which further contribute to poor hygiene and increased susceptibility to diseases.
Although there have been various government initiatives to supply healthcare amenities to the rural population and also the slum dwelling urban population, these efforts are clearly not sufficient.
Distribution of households having safe drinking water facilities in India (percent)
1991 2001
Rural Urban Rural Urban
55.54 81.38 73.2 90
Source: National Health Profile 2009
Distribution of households having electricity in India 2001 (percent)
2001
Rural Urban Total
43.53 87.58 55.85
Source: National Health Profile 2009
© 2010 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
© 2010 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
3 4
Demand and supply analysis II: Inter-state disparity
India is a diverse country with 28 states and seven union territories, each receiving different densities of rainfall, and experiencing different weather conditions. There is also a difference in the socio-economic status of people, literacy levels, living conditions and political situations. These factors play a significant role in the difference in the healthcare status and resources across states.
For instance, female life expectancy in Kerala is the highest and approximately 16 years more than that in states such as Uttar Pradesh and Bihar. The female infant mortality rate in Madhya Pradesh is approximately 7.2 times more than that in Kerala. Similarly, the maternal mortality rate in Rajasthan is almost thrice that in Maharashtra, as indicative in the table.
States such as Uttar Pradesh, Bihar, Orissa, and Madhya Pradesh rank poorly when compared with Kerala, Maharashtra, Tamil Nadu, Gujarat, and Andhra Pradesh.
States Life expectancy (Years)
Infant mortality rates (per 1000
live births)
Maternal mortality ratio (per 100,000
live births) mortality
2002-06 20082004-06
Male Female Male Female
Punjab 68.4 70.4 39 43 192
Bihar 62.2 60.4 53 58 312
Uttar Pradesh 60.3 59.5 64 70 440
Rajasthan 61.5 62.3 60 65 388
Gujarat 62.9 65.2 49 51 160
Maharashtra 66 68.4 33 33 130
West Bengal 64.1 65.8 34 37 141
Karnataka 63.6 67.1 44 46 213
Madhya Pradesh 58.1 57.9 68 72 335
Orissa 59.5 59.6 68 70 303
Kerala 71.4 76.3 10 13 95
State/UT Rural Hospitals Urban Hospitals Total Hospitals Projected Population as on reference period (In thousand)
Average Population Served Per Govt. Hospital
Average Population Served Per Govt. Hospital Bed
Reference Period
Number Beds Number Beds Number Beds
Punjab 72 2180 159 8440 231 10620 26391 114247 2485 01.01.2008
Bihar NA NA NA NA 1717 22494 93633 54533 4163 01.09.2008
Uttar Pradesh 397 11910 528 20550 925 32460 183282 198143 5646 01.01.2007
Rajasthan 347 11850 128 20217 475 32067 63408 133491 1977 01.01.2008
Gujarat 282 9619 91 19339 373 28958 57434 153979 1983 01.01.2010
Maharashtra 376 11280 389 38299 765 49579 109553 143207 2210 01.01.2010
West Bengal 14 2399 280 52360 294 54759 87839 298772 1604 01.01.2010
Karnataka 468 8010 451 55731 919 63741 58181 63309 913 01.01.2010
Kerala 281 13756 105 17529 386 31285 34063 88246 1089 01.01.2010
Source: National Health Profile 2009
Source: National Health Profile 2009
There is also a significant disparity in number of hospitals and hospital beds serving the population across states.
Evidently, the average population served per government hospital bed in states such as Uttar Pradesh and Bihar is much higher when compared with Kerala or West Bengal. This indicates that the ease of availability of healthcare facilities to a person in Kerala is much greater as compared to a person in Uttar Pradesh.
Case study I: Status of healthcare in Nalanda (Bihar)
Nalanda district, a university town of Bihar, has been in the news for its increasing number of ‘hunger deaths’.
In a study of 593 districts in the country, Nalanda ranked 509 in health
8indicators .
In a field visit to Nalanda in May 2010, 9World Vision India observed :
• High out-of-pocket fees, even at public health facilities, were preventing people from accessing services. There were indications of debt bondage to landowners, due to health costs
• Few families had child immunization cards
• In one particular village of roughly 400 beneficiaries, inaccessible by road, there was no doctor, no private medical provider, no dais, and only 1 visiting accredited social health activist
• Virtually no access to family planning, and no involvement of adolescent girls in area welfare centers.
Case study II: Maternal mortality in Assam
Assam has the country's highest rate 10of maternal mortality . The main reason
for this is observed to be insurgency, affecting accessibility of healthcare services.
The involvement of the government healthcare agencies and other stakeholders is also reportedly insufficient.
Most northeastern women are anemic and the children are highly prone to mumps measles rubella and other infectitious diseases resulting from weak immunity. This could be likely attributed to a combination of reasons that interplay including social issues, insurgency, slow development, lack of infrastructure, inadequate manpower resources in healthcare system.
Case study III: Malnutrition in India
The World Bank estimates that India is globally ranked 2nd in the number of children suffering from malnutrition, after Bangladesh, where 47 percent of the children exhibit a degree of
11malnutrition . The number of underweight children in India is among the highest in the world.
Under-nutrition among children and women in Bihar is much higher than the national level with 54.4 percent children being underweight and 81 percent anemic. More than half of children (56 percent) under age five are
12stunted or too short for their age .
Children in rural areas are more likely to be malnourished; however, even in urban areas, almost half of children under age five years suffer from chronic
13under nutrition (48 percent) .
Vitamin A deficiency can contribute to a higher risk of dying from measles, diarrhea, or malaria. The Government of India recommends that children under three years receive vitamin A supplements every six months, starting at age nine months. However, only one in three last-born children age 12-35 months were given a vitamin A supplement in the six months prior to
14the NFHS 3 .
8 MoHFW, ’Ranking and Mapping of Districts based on socio-economic and demographic indicators’ (2006)
9 World Vision India – India Statistics
10 National Health Profile 2009
11 World Vision India – India Statistics
12 World Vision India- India statistics- Bihar fact sheet
13 World Vision India- India statistics
14 National Family Health Survey (NFHS-3, 2005-06)
State/UT wise number of government hospitals and beds in rural and urban areas (including CHCs) in India
© 2010 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
© 2010 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
5 6
Demand and supply analysis II: Inter-state disparity
India is a diverse country with 28 states and seven union territories, each receiving different densities of rainfall, and experiencing different weather conditions. There is also a difference in the socio-economic status of people, literacy levels, living conditions and political situations. These factors play a significant role in the difference in the healthcare status and resources across states.
For instance, female life expectancy in Kerala is the highest and approximately 16 years more than that in states such as Uttar Pradesh and Bihar. The female infant mortality rate in Madhya Pradesh is approximately 7.2 times more than that in Kerala. Similarly, the maternal mortality rate in Rajasthan is almost thrice that in Maharashtra, as indicative in the table.
States such as Uttar Pradesh, Bihar, Orissa, and Madhya Pradesh rank poorly when compared with Kerala, Maharashtra, Tamil Nadu, Gujarat, and Andhra Pradesh.
States Life expectancy (Years)
Infant mortality rates (per 1000
live births)
Maternal mortality ratio (per 100,000
live births) mortality
2002-06 20082004-06
Male Female Male Female
Punjab 68.4 70.4 39 43 192
Bihar 62.2 60.4 53 58 312
Uttar Pradesh 60.3 59.5 64 70 440
Rajasthan 61.5 62.3 60 65 388
Gujarat 62.9 65.2 49 51 160
Maharashtra 66 68.4 33 33 130
West Bengal 64.1 65.8 34 37 141
Karnataka 63.6 67.1 44 46 213
Madhya Pradesh 58.1 57.9 68 72 335
Orissa 59.5 59.6 68 70 303
Kerala 71.4 76.3 10 13 95
State/UT Rural Hospitals Urban Hospitals Total Hospitals Projected Population as on reference period (In thousand)
Average Population Served Per Govt. Hospital
Average Population Served Per Govt. Hospital Bed
Reference Period
Number Beds Number Beds Number Beds
Punjab 72 2180 159 8440 231 10620 26391 114247 2485 01.01.2008
Bihar NA NA NA NA 1717 22494 93633 54533 4163 01.09.2008
Uttar Pradesh 397 11910 528 20550 925 32460 183282 198143 5646 01.01.2007
Rajasthan 347 11850 128 20217 475 32067 63408 133491 1977 01.01.2008
Gujarat 282 9619 91 19339 373 28958 57434 153979 1983 01.01.2010
Maharashtra 376 11280 389 38299 765 49579 109553 143207 2210 01.01.2010
West Bengal 14 2399 280 52360 294 54759 87839 298772 1604 01.01.2010
Karnataka 468 8010 451 55731 919 63741 58181 63309 913 01.01.2010
Kerala 281 13756 105 17529 386 31285 34063 88246 1089 01.01.2010
Source: National Health Profile 2009
Source: National Health Profile 2009
There is also a significant disparity in number of hospitals and hospital beds serving the population across states.
Evidently, the average population served per government hospital bed in states such as Uttar Pradesh and Bihar is much higher when compared with Kerala or West Bengal. This indicates that the ease of availability of healthcare facilities to a person in Kerala is much greater as compared to a person in Uttar Pradesh.
Case study I: Status of healthcare in Nalanda (Bihar)
Nalanda district, a university town of Bihar, has been in the news for its increasing number of ‘hunger deaths’.
In a study of 593 districts in the country, Nalanda ranked 509 in health
8indicators .
In a field visit to Nalanda in May 2010, 9World Vision India observed :
• High out-of-pocket fees, even at public health facilities, were preventing people from accessing services. There were indications of debt bondage to landowners, due to health costs
• Few families had child immunization cards
• In one particular village of roughly 400 beneficiaries, inaccessible by road, there was no doctor, no private medical provider, no dais, and only 1 visiting accredited social health activist
• Virtually no access to family planning, and no involvement of adolescent girls in area welfare centers.
Case study II: Maternal mortality in Assam
Assam has the country's highest rate 10of maternal mortality . The main reason
for this is observed to be insurgency, affecting accessibility of healthcare services.
The involvement of the government healthcare agencies and other stakeholders is also reportedly insufficient.
Most northeastern women are anemic and the children are highly prone to mumps measles rubella and other infectitious diseases resulting from weak immunity. This could be likely attributed to a combination of reasons that interplay including social issues, insurgency, slow development, lack of infrastructure, inadequate manpower resources in healthcare system.
Case study III: Malnutrition in India
The World Bank estimates that India is globally ranked 2nd in the number of children suffering from malnutrition, after Bangladesh, where 47 percent of the children exhibit a degree of
11malnutrition . The number of underweight children in India is among the highest in the world.
Under-nutrition among children and women in Bihar is much higher than the national level with 54.4 percent children being underweight and 81 percent anemic. More than half of children (56 percent) under age five are
12stunted or too short for their age .
Children in rural areas are more likely to be malnourished; however, even in urban areas, almost half of children under age five years suffer from chronic
13under nutrition (48 percent) .
Vitamin A deficiency can contribute to a higher risk of dying from measles, diarrhea, or malaria. The Government of India recommends that children under three years receive vitamin A supplements every six months, starting at age nine months. However, only one in three last-born children age 12-35 months were given a vitamin A supplement in the six months prior to
14the NFHS 3 .
8 MoHFW, ’Ranking and Mapping of Districts based on socio-economic and demographic indicators’ (2006)
9 World Vision India – India Statistics
10 National Health Profile 2009
11 World Vision India – India Statistics
12 World Vision India- India statistics- Bihar fact sheet
13 World Vision India- India statistics
14 National Family Health Survey (NFHS-3, 2005-06)
State/UT wise number of government hospitals and beds in rural and urban areas (including CHCs) in India
© 2010 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
© 2010 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
5 6
Source: NRHM Document 2009 on Rural Healthcare System in India
0
10
20
30
40
50
60
Health Worker(Female)/ Auxiliary
Nurse Midwife
Health Worker(Male)
Lady Health Visitor/Health Assistants
(Female)
Health Assistant(Male)
Doctors at PHC
Perc
enra
ge
Shortfall - Percentage of shortfall as compared to requirement based on existing infrastructure at Sub Centers and PHCs (As on March, 2008)
Source: NRHM Document 2009 on Rural Healthcare System in India
0
5
10
15
20
25
30
Health Worker(Female)/ Auxiliary
Nurse Midwife
Health Worker(Male)
Lady Health Visitor/Health Assistants
(Female)
Health Assistant(Male)
Doctors at PHCPe
rcen
tah
e
Vacancy position - percentage of sanctioned post vacant at PHCs (as on March, 2008)
State of public healthcare infrastructureIn a developing country like India, the primarily attributed to the poor public sector has a critical role in healthcare expenditure by the ensuring healthcare delivery to all government. The public sector accounts sections of the society. According to for a mere 26 percent of the total
1the Planning Commission, outpatient healthcare expenditure . India’s public services are 20-54 percent costlier and health spending has increased from inpatient services 100-740 percent 0.22 percent of GDP in 1950-51 to 1.05 costlier than public healthcare. Hence, percent during the mid 1980s and the role of the public sector in ensuring stagnated at a mere 1 percent of the
2accessibility cannot be emphasized GDP in the recent years . The per capita enough. government spending is significantly
lower than the other BRIC nations. However, the current status of healthcare infrastructure in India and the huge regional disparity can be
3However, the government of India aims to increase healthcare expenditure to 3 percent of GDP by 2012.
Even out of the sanctioned posts, a considerable percentage of posts are vacant across all the levels.
Indicator India US UK Japan Brazil Russia China
Total expenditure on health as a percent of GDP (2007) 4.1 15.7 8.4 8 8.4 5.4 4.3
Government expenditure as a percent of total health expenditure (2007) 26.2 45.5 81.7 81.3 41.6 64.2 44.7
Private expenditure as a percent of total health expenditure (2007) 73.8 54.5 18.3 18.7 58.4 35.8 55.3
Per capita total expenditure on health (PPP int. USD) 109 7285 2992 2696 837 797 233
Per capita government expenditure on health at average exchange rate (USD 2007) 11 3317 3161 2237 252 316 49
Per capita government expenditure on health (PPP int. USD 2007) 29 3317 2446 2193 348 512 104
Source: World Health Statistics 2010
1 World Health Statistics 2010
2 National Health Profile 2009, World Health Statistics 2010
3 Department of Health and Family Welfare Annual Report FY10
Primary healthcare infrastructure
The primary healthcare infrastructure The Sub Center is the most peripheral has a three tier system with Sub contact point between the Primary Centers, Primary Health Centers Healthcare System and the community. (PHCs) and Community Health Centers Hence, manpower is an important (CHCs) spread across rural and semi- prerequisite for the efficient functioning urban areas. The tertiary care of this set-up. However, as per the comprising multi-specialty hospitals table below, there is a significant and medical colleges are located shortage of healthcare manpower in almost exclusively in urban regions. sub centers and primary health centers.
12.4
6.1
28.3
13.4
27.6
18.8
56.8
29.1
39.1
15.1
© 2010 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
© 2010 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
7 8
Source: NRHM Document 2009 on Rural Healthcare System in India
0
10
20
30
40
50
60
Health Worker(Female)/ Auxiliary
Nurse Midwife
Health Worker(Male)
Lady Health Visitor/Health Assistants
(Female)
Health Assistant(Male)
Doctors at PHC
Perc
enra
ge
Shortfall - Percentage of shortfall as compared to requirement based on existing infrastructure at Sub Centers and PHCs (As on March, 2008)
Source: NRHM Document 2009 on Rural Healthcare System in India
0
5
10
15
20
25
30
Health Worker(Female)/ Auxiliary
Nurse Midwife
Health Worker(Male)
Lady Health Visitor/Health Assistants
(Female)
Health Assistant(Male)
Doctors at PHC
Perc
enta
he
Vacancy position - percentage of sanctioned post vacant at PHCs (as on March, 2008)
State of public healthcare infrastructureIn a developing country like India, the primarily attributed to the poor public sector has a critical role in healthcare expenditure by the ensuring healthcare delivery to all government. The public sector accounts sections of the society. According to for a mere 26 percent of the total
1the Planning Commission, outpatient healthcare expenditure . India’s public services are 20-54 percent costlier and health spending has increased from inpatient services 100-740 percent 0.22 percent of GDP in 1950-51 to 1.05 costlier than public healthcare. Hence, percent during the mid 1980s and the role of the public sector in ensuring stagnated at a mere 1 percent of the
2accessibility cannot be emphasized GDP in the recent years . The per capita enough. government spending is significantly
lower than the other BRIC nations. However, the current status of healthcare infrastructure in India and the huge regional disparity can be
3However, the government of India aims to increase healthcare expenditure to 3 percent of GDP by 2012.
Even out of the sanctioned posts, a considerable percentage of posts are vacant across all the levels.
Indicator India US UK Japan Brazil Russia China
Total expenditure on health as a percent of GDP (2007) 4.1 15.7 8.4 8 8.4 5.4 4.3
Government expenditure as a percent of total health expenditure (2007) 26.2 45.5 81.7 81.3 41.6 64.2 44.7
Private expenditure as a percent of total health expenditure (2007) 73.8 54.5 18.3 18.7 58.4 35.8 55.3
Per capita total expenditure on health (PPP int. USD) 109 7285 2992 2696 837 797 233
Per capita government expenditure on health at average exchange rate (USD 2007) 11 3317 3161 2237 252 316 49
Per capita government expenditure on health (PPP int. USD 2007) 29 3317 2446 2193 348 512 104
Source: World Health Statistics 2010
1 World Health Statistics 2010
2 National Health Profile 2009, World Health Statistics 2010
3 Department of Health and Family Welfare Annual Report FY10
Primary healthcare infrastructure
The primary healthcare infrastructure The Sub Center is the most peripheral has a three tier system with Sub contact point between the Primary Centers, Primary Health Centers Healthcare System and the community. (PHCs) and Community Health Centers Hence, manpower is an important (CHCs) spread across rural and semi- prerequisite for the efficient functioning urban areas. The tertiary care of this set-up. However, as per the comprising multi-specialty hospitals table below, there is a significant and medical colleges are located shortage of healthcare manpower in almost exclusively in urban regions. sub centers and primary health centers.
12.4
6.1
28.3
13.4
27.6
18.8
56.8
29.1
39.1
15.1
© 2010 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
© 2010 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
7 8
Need for standardization of healthcare infrastructure
In India, the National Accreditation To further encourage application for The lack of standardization of Board for Hospitals and Healthcare accreditation, India can consider healthcare infrastructure raises serious Providers (NABH), a constituent board offering attractive fiscal incentives, like concerns about quality. It is observed of Quality Council of India (QCI) set up several developed countries.that the standard of service in terms of with the cooperation of the Ministry of cost, diagnostic procedures and Health & Family Welfare and the Indian therapeutic treatments differs with industry, sets standards for hospitals. A different providers. This disparity complete set of standards have been increases with the urban-rural and drafted by Technical Committee of the interstate divide, resulting in low NABH for evaluation of hospitals for customer satisfaction, unethical
4grant of accreditation .practices such as longer hospital stays, expensive treatments and drugs. One Although accreditation in India is of the most effective approaches to voluntary, several Indian hospitals are cope with this disparity is to bring in increasingly seeking accreditation from standardization of protocols as well as national as well as global agencies.costs through accreditation.
Accreditation offers several advantages such as providing higher efficiency, accountability, and better governance. It can potentially greatly benefit patients and their safety due to increased credibility. It encourages continuous improvement of the hard infrastructure as well as upgradation of the medical and para-medical staff.
Need to use information technologytelemedicine services while some have The use of Information Technology (IT) also developed PPPs for the same; can play a very important role in these include Apollo, AIIMS, Arvind enhancing the healthcare delivery Hospitals, etc. Organizations such as mechanisms. While IT applications in Asian Heart Institute (AHI) and Indian the healthcare space have been Space Research Organization (ISRO) increasing in India, they are still quite
5have plans in this space . However, the limited when compared with developed current healthcare scenario in the countries. Some areas where country calls for the implementation of technology is being applied are hospital a large scale / nationwide telemedicine management systems, decision programme with a specific focus on the support systems that improve underserved states.diagnosis and treatment, telemedicine
and Picture Archiving and Use of IT in healthcare improves patient Communication System (PACS). care by enabling systems and
processes to be introduced and Telemedicine, which is the use of IT for monitored repeatedly. However, lack of delivering health services and standardization and regulations in the information over distances, has a sector have been the major roadblocks substantial scope for growth in India. in adopting IT solutions. Also, the The use of telemedicine can greatly aid fragmented nature of the Indian in dealing with the shortage of healthcare system has considerably healthcare staff and improving the slowed down the adoption of IT in the penetration of healthcare infrastructure sector.and resources in the underserved semi-
urban and particularly rural areas. Various private hospitals have adopted
Need to upgrade medical education infrastructure
However, despite this rapid growth, this There is also a shortage of nurses in Despite rapid development of medical supply of medical personnel is grossly the country. It is expected that, to meet education infrastructure, the demand-insufficent to meet the estimated the global average of 2.56 nurses per supply gap of medical professionals requirement of doctors as seen in the 1000 population in the coming 15 years, continues to widen.table below. India needs to add 1500 nursing
10Medical education infrastructure in the colleges .country has witnessed rapid growth during the last 19 years. The number of medical colleges in India has been growing at a very high rate rate, and has more than doubled between FY92
6and FY10 . Correspondingly, the number of medical admissions (Bachelor of Medicine and Bachelor of Surgery) has increased by around 2.8
7times . As of FY10, India had Further, estimates indicate that around approximately 300 medical colleges, 10 percent of medical graduates go 290 colleges for Bachelor of Dental abroad in pursuit of post graduation Surgery and 140 colleges for Master of 8courses .It is also estimated that Dental Surgery admitting 34,595, approximately 60,000 Indian physicians 23520 and 2,644 students annually work in countries like US, UK and respectively. 9Australia .
No. of Indian Hospitals - Accredited and Applicants
National Accreditation Board for Hospital and Healthcare Providers
NABH Accredited 51
NABH Applicants 358
Joint Commission International
Accredited 16
Source: http://www.qcin.org, http://www.jointcommissioninternational.org/JCI-Accredited-Organizations/
Source: National Health Profile 2009
Category Current Required
Physicians 757377 1200000
Dental surgeons 93332 300000
5 Netscribes Hospital Market-India, February 2009
6 National Health Profile 2009
4 Quality Control of India Website
7 National Health Profile 2009, KPMG Analysis
8 The Hindu, Medicine for medical education, November 16, 2009
9 The Times of India, India short of 6 lakh doctors, 2008
10 World health report 2006
© 2010 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
© 2010 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
9 10
Need for standardization of healthcare infrastructure
In India, the National Accreditation To further encourage application for The lack of standardization of Board for Hospitals and Healthcare accreditation, India can consider healthcare infrastructure raises serious Providers (NABH), a constituent board offering attractive fiscal incentives, like concerns about quality. It is observed of Quality Council of India (QCI) set up several developed countries.that the standard of service in terms of with the cooperation of the Ministry of cost, diagnostic procedures and Health & Family Welfare and the Indian therapeutic treatments differs with industry, sets standards for hospitals. A different providers. This disparity complete set of standards have been increases with the urban-rural and drafted by Technical Committee of the interstate divide, resulting in low NABH for evaluation of hospitals for customer satisfaction, unethical
4grant of accreditation .practices such as longer hospital stays, expensive treatments and drugs. One Although accreditation in India is of the most effective approaches to voluntary, several Indian hospitals are cope with this disparity is to bring in increasingly seeking accreditation from standardization of protocols as well as national as well as global agencies.costs through accreditation.
Accreditation offers several advantages such as providing higher efficiency, accountability, and better governance. It can potentially greatly benefit patients and their safety due to increased credibility. It encourages continuous improvement of the hard infrastructure as well as upgradation of the medical and para-medical staff.
Need to use information technologytelemedicine services while some have The use of Information Technology (IT) also developed PPPs for the same; can play a very important role in these include Apollo, AIIMS, Arvind enhancing the healthcare delivery Hospitals, etc. Organizations such as mechanisms. While IT applications in Asian Heart Institute (AHI) and Indian the healthcare space have been Space Research Organization (ISRO) increasing in India, they are still quite
5have plans in this space . However, the limited when compared with developed current healthcare scenario in the countries. Some areas where country calls for the implementation of technology is being applied are hospital a large scale / nationwide telemedicine management systems, decision programme with a specific focus on the support systems that improve underserved states.diagnosis and treatment, telemedicine
and Picture Archiving and Use of IT in healthcare improves patient Communication System (PACS). care by enabling systems and
processes to be introduced and Telemedicine, which is the use of IT for monitored repeatedly. However, lack of delivering health services and standardization and regulations in the information over distances, has a sector have been the major roadblocks substantial scope for growth in India. in adopting IT solutions. Also, the The use of telemedicine can greatly aid fragmented nature of the Indian in dealing with the shortage of healthcare system has considerably healthcare staff and improving the slowed down the adoption of IT in the penetration of healthcare infrastructure sector.and resources in the underserved semi-
urban and particularly rural areas. Various private hospitals have adopted
Need to upgrade medical education infrastructure
However, despite this rapid growth, this There is also a shortage of nurses in Despite rapid development of medical supply of medical personnel is grossly the country. It is expected that, to meet education infrastructure, the demand-insufficent to meet the estimated the global average of 2.56 nurses per supply gap of medical professionals requirement of doctors as seen in the 1000 population in the coming 15 years, continues to widen.table below. India needs to add 1500 nursing
10Medical education infrastructure in the colleges .country has witnessed rapid growth during the last 19 years. The number of medical colleges in India has been growing at a very high rate rate, and has more than doubled between FY92
6and FY10 . Correspondingly, the number of medical admissions (Bachelor of Medicine and Bachelor of Surgery) has increased by around 2.8
7times . As of FY10, India had Further, estimates indicate that around approximately 300 medical colleges, 10 percent of medical graduates go 290 colleges for Bachelor of Dental abroad in pursuit of post graduation Surgery and 140 colleges for Master of 8courses .It is also estimated that Dental Surgery admitting 34,595, approximately 60,000 Indian physicians 23520 and 2,644 students annually work in countries like US, UK and respectively. 9Australia .
No. of Indian Hospitals - Accredited and Applicants
National Accreditation Board for Hospital and Healthcare Providers
NABH Accredited 51
NABH Applicants 358
Joint Commission International
Accredited 16
Source: http://www.qcin.org, http://www.jointcommissioninternational.org/JCI-Accredited-Organizations/
Source: National Health Profile 2009
Category Current Required
Physicians 757377 1200000
Dental surgeons 93332 300000
5 Netscribes Hospital Market-India, February 2009
6 National Health Profile 2009
4 Quality Control of India Website
7 National Health Profile 2009, KPMG Analysis
8 The Hindu, Medicine for medical education, November 16, 2009
9 The Times of India, India short of 6 lakh doctors, 2008
10 World health report 2006
© 2010 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
© 2010 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
9 10
15Medical personnel concentrated in modern teaching methods. All this billion by FY15 . The growth of the urban areas emulates into a static medical market is being driven by the improving
education system. Therefore, socioeconomic and demographic The demand-supply gap of medical strengthening faculty development environment, favorable regulatory resources is more prominent in rural programmes is critical for capacity environment as well as significant areas. Around 74 percent of the building in medical education in India. marketing push by insurance graduate doctors in India work in urban
companies.settlements which account for only 28 It is important to note that all these percent of the population. Hence, the challenges require a massive expansion However, the growth will also depend population in rural areas remains largely of the education facilities with a on the ability of the key stakeholders
11unserved . Moreover the skewed continuous focus on upgrading the viz. government, regulators, healthcare countrywide distribution of these quality of existing infrastructure. It providers, insurance companies, institutes results in widening this gap therefore requires concerted efforts of NGOs/SHGs, TPAs, distribution channel even further. Sixty one percent of the the public as well private sector. partners, health centers and the media medical colleges are in the six states of to strengthen the industry.Maharashtra, Karnataka, Kerala, Tamil Nadu, Andhra Pradesh and Puducherry, while only 11 percent are in Bihar, Jharkhand, Orissa and West Bengal and
12 With limited public healthcare funding, the north-eastern states . The students out-of-pocket spending has been forced studying in more developed states are and become the only option for India. unlikely to serve their semi-urban or
rural areas after graduation where the As already stated earlier, the public potential of fee income is lower as sector plays a small role in healthcare compared with urban areas. financing. Hence, the private sector has
a pivotal role in financing the healthcare Further, the benefits of healthcare in a expenditure in India, with out-of-pocket tertiary care setting at reasonable expenditure accounting for a prices is available only to those patients disproportionate 90 percent funding of who lie within the catchment area of the private expenditure on health. Thus, the medical colleges, most of which are
12 the spending on healthcare is largely set up in the urban areas . determined by an increase in the
Lastly, almost 70 percent of the purchasing power of people. This medical colleges set up in the last five makes healthcare elusive for the lower
12years are in the private sector , where and middle income group, which the economic motivation is overbearing accounts for a majority section of the other social objective and fees are total population. Therefore, health higher and unaffordable. insurance has a critical role in improving
access to healthcare services in India. Increasing penetration of medical
Lack of qualified faculty base insurance would also result in an increased demand for quality The quality of medical education is healthcare services. defined by the availability and quality of
teachers. The shortage of teachers is The penetration of health insurance is estimated at approximately 30-40 increasing over the years. The health
12percent in medical colleges . The insurance industry is the fastest growth in the number of teachers has growing segment in non-life insurance not been commensurate to the surge in segments. The Indian health insurance the number of medical institutions over industry is valued at INR 51 billion and the last few years, thereby bringing has grown at a compounded annual down the teacher-student ratio. The growth rate of around 37 percent
13shortage is more severe in the pre- (between FY02 and FY08). clinical and para-clinical areas. Besides
In spite of this, the coverage of health this, there is also the quality aspect insurance in India is merely around 10 that cannot be ignored. There are
14percent of the total population.limited formal teacher training programmes and the absence of a Overall, the health insurance industry in monitoring mechanism for faculty India is expected to grow at a CAGR of learning. As a result, most medical 25-30 percent till FY15 to reach the college teachers remain untrained in market size of approximately INR 280
Need for health insurance penetration
ConclusionPublic-Private Partnership – The all inclusive way forward
In light of the current status of 2. Achieve economies of scale and Through the partnerships, it is healthcare in India, a Public-Private possible cost reduction by possible to provide the public with Partnership (PPP) approach appears as standardizing the services good quality, high-tech care at probably the only all inclusive way throughout the initiative affordable prices.forward that will address all the issues
3. Utilizing the existing capacity of the stated in this background note. A PPP
system: It is thus much faster to is a synergistic model to bring together The areas where private sector
implement, as very little the social objectives (of the contribution can prove very beneficial
infrastructure development is government) of universal healthcare are:
needed (in many instances). The access and affordability and the
effort is to make use of the existing 1 Infrastructure Development - business objective of running a
facilities, wherever feasible Development and strengthening of profitable healthcare facility (industry).
healthcare infrastructure that is 4. Create synergy between the public
While the public sector contributes in evenly distributed geographically and and private systems thereby
terms of infrastructure development, at all levels of carereducing the duplication of efforts
land acquisition, financing, etc., the and wastage of funds 2 Management and Operations -
private party brings in its knowledge Management and operation of
and expertise of project management 5. Targeting the poor: By focusing more healthcare facilities for technical
and operational efficiency. on the primary care aspect of efficiency, operational economy and
healthcare and making available Public-private partnerships have distinct quality
good quality healthcare services at advantages and help to achieve desired
affordable prices, it is possible to 3 Capacity Building and Training - health outcomes.
provide acceptable and sustainable Capacity building for formal, informal public healthcare even to the poorest and continuing education of
professional, para-professional and 1. Creating competition: 6. Flexibility in action: The country is
ancillary staff engaged in the delivery passing through a phase of health
a. Competition between the PPP of healthcareand demographic transition.
initiative facilities with other However, this transition of health is 4 Financing Mechanism - Creation of
healthcare providers would make not uniform throughout the country. voluntary as well as mandated third-
even the private facilities available to While a few states are in early party financing mechanisms
the poor through reduction in their stages of demographic transition,
costs 5 IT Infrastructure - Establishment of and still have a high birth rate, low
national and regional IT backbones b. Greater choice of services would be utilization of public healthcare, etc.,
and health data repositories for available to the poor few states on the other end of the
ready access to clinical informationspectrum, have already reached
c. Better quality of services can be replacement level of population 6 Materials Management -
achieved by setting up of standard growth, having efficient public Development of a maintenance and
guidelines for the initiative healthcare delivery services, etc. supply chain for ready availability of
participants. Thus a basic minimum Thus by developing models involving serviceable equipment and
level of quality of healthcare services PPP and taking into cognizance the appliances, and medical supplies and
would be maintained. The competing specific needs of the states, it is sundries at the point of care.
private healthcare providers would possible to address the disparity in
try to improve the quality as well, to healthcare needs
increase/ retain their clientele7. The demographic transition has also
In summary, through this initiative, been accompanied by a
the private providers may have to technological revolution in the
compete with public sector providers country with newer techniques,
to act as agents for providing public instruments and expertise available
healthcare to the poor.for healthcare service delivery.
11 Task Force on Medical Education for the National Rural Health Mission
12 The National Medical Journal of India Vol. 23, No. 3, 2010
13 CII KPMG Health Insurance Summit 2008 Report
14 Crisil Research Annual Hospital Review 2009
15 CII KPMG Health Insurance Summit 2008 Report
© 2010 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
© 2010 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
11 12
15Medical personnel concentrated in modern teaching methods. All this billion by FY15 . The growth of the urban areas emulates into a static medical market is being driven by the improving
education system. Therefore, socioeconomic and demographic The demand-supply gap of medical strengthening faculty development environment, favorable regulatory resources is more prominent in rural programmes is critical for capacity environment as well as significant areas. Around 74 percent of the building in medical education in India. marketing push by insurance graduate doctors in India work in urban
companies.settlements which account for only 28 It is important to note that all these percent of the population. Hence, the challenges require a massive expansion However, the growth will also depend population in rural areas remains largely of the education facilities with a on the ability of the key stakeholders
11unserved . Moreover the skewed continuous focus on upgrading the viz. government, regulators, healthcare countrywide distribution of these quality of existing infrastructure. It providers, insurance companies, institutes results in widening this gap therefore requires concerted efforts of NGOs/SHGs, TPAs, distribution channel even further. Sixty one percent of the the public as well private sector. partners, health centers and the media medical colleges are in the six states of to strengthen the industry.Maharashtra, Karnataka, Kerala, Tamil Nadu, Andhra Pradesh and Puducherry, while only 11 percent are in Bihar, Jharkhand, Orissa and West Bengal and
12 With limited public healthcare funding, the north-eastern states . The students out-of-pocket spending has been forced studying in more developed states are and become the only option for India. unlikely to serve their semi-urban or
rural areas after graduation where the As already stated earlier, the public potential of fee income is lower as sector plays a small role in healthcare compared with urban areas. financing. Hence, the private sector has
a pivotal role in financing the healthcare Further, the benefits of healthcare in a expenditure in India, with out-of-pocket tertiary care setting at reasonable expenditure accounting for a prices is available only to those patients disproportionate 90 percent funding of who lie within the catchment area of the private expenditure on health. Thus, the medical colleges, most of which are
12 the spending on healthcare is largely set up in the urban areas . determined by an increase in the
Lastly, almost 70 percent of the purchasing power of people. This medical colleges set up in the last five makes healthcare elusive for the lower
12years are in the private sector , where and middle income group, which the economic motivation is overbearing accounts for a majority section of the other social objective and fees are total population. Therefore, health higher and unaffordable. insurance has a critical role in improving
access to healthcare services in India. Increasing penetration of medical
Lack of qualified faculty base insurance would also result in an increased demand for quality The quality of medical education is healthcare services. defined by the availability and quality of
teachers. The shortage of teachers is The penetration of health insurance is estimated at approximately 30-40 increasing over the years. The health
12percent in medical colleges . The insurance industry is the fastest growth in the number of teachers has growing segment in non-life insurance not been commensurate to the surge in segments. The Indian health insurance the number of medical institutions over industry is valued at INR 51 billion and the last few years, thereby bringing has grown at a compounded annual down the teacher-student ratio. The growth rate of around 37 percent
13shortage is more severe in the pre- (between FY02 and FY08). clinical and para-clinical areas. Besides
In spite of this, the coverage of health this, there is also the quality aspect insurance in India is merely around 10 that cannot be ignored. There are
14percent of the total population.limited formal teacher training programmes and the absence of a Overall, the health insurance industry in monitoring mechanism for faculty India is expected to grow at a CAGR of learning. As a result, most medical 25-30 percent till FY15 to reach the college teachers remain untrained in market size of approximately INR 280
Need for health insurance penetration
ConclusionPublic-Private Partnership – The all inclusive way forward
In light of the current status of 2. Achieve economies of scale and Through the partnerships, it is healthcare in India, a Public-Private possible cost reduction by possible to provide the public with Partnership (PPP) approach appears as standardizing the services good quality, high-tech care at probably the only all inclusive way throughout the initiative affordable prices.forward that will address all the issues
3. Utilizing the existing capacity of the stated in this background note. A PPP
system: It is thus much faster to is a synergistic model to bring together The areas where private sector
implement, as very little the social objectives (of the contribution can prove very beneficial
infrastructure development is government) of universal healthcare are:
needed (in many instances). The access and affordability and the
effort is to make use of the existing 1 Infrastructure Development - business objective of running a
facilities, wherever feasible Development and strengthening of profitable healthcare facility (industry).
healthcare infrastructure that is 4. Create synergy between the public
While the public sector contributes in evenly distributed geographically and and private systems thereby
terms of infrastructure development, at all levels of carereducing the duplication of efforts
land acquisition, financing, etc., the and wastage of funds 2 Management and Operations -
private party brings in its knowledge Management and operation of
and expertise of project management 5. Targeting the poor: By focusing more healthcare facilities for technical
and operational efficiency. on the primary care aspect of efficiency, operational economy and
healthcare and making available Public-private partnerships have distinct quality
good quality healthcare services at advantages and help to achieve desired
affordable prices, it is possible to 3 Capacity Building and Training - health outcomes.
provide acceptable and sustainable Capacity building for formal, informal public healthcare even to the poorest and continuing education of
professional, para-professional and 1. Creating competition: 6. Flexibility in action: The country is
ancillary staff engaged in the delivery passing through a phase of health
a. Competition between the PPP of healthcareand demographic transition.
initiative facilities with other However, this transition of health is 4 Financing Mechanism - Creation of
healthcare providers would make not uniform throughout the country. voluntary as well as mandated third-
even the private facilities available to While a few states are in early party financing mechanisms
the poor through reduction in their stages of demographic transition,
costs 5 IT Infrastructure - Establishment of and still have a high birth rate, low
national and regional IT backbones b. Greater choice of services would be utilization of public healthcare, etc.,
and health data repositories for available to the poor few states on the other end of the
ready access to clinical informationspectrum, have already reached
c. Better quality of services can be replacement level of population 6 Materials Management -
achieved by setting up of standard growth, having efficient public Development of a maintenance and
guidelines for the initiative healthcare delivery services, etc. supply chain for ready availability of
participants. Thus a basic minimum Thus by developing models involving serviceable equipment and
level of quality of healthcare services PPP and taking into cognizance the appliances, and medical supplies and
would be maintained. The competing specific needs of the states, it is sundries at the point of care.
private healthcare providers would possible to address the disparity in
try to improve the quality as well, to healthcare needs
increase/ retain their clientele7. The demographic transition has also
In summary, through this initiative, been accompanied by a
the private providers may have to technological revolution in the
compete with public sector providers country with newer techniques,
to act as agents for providing public instruments and expertise available
healthcare to the poor.for healthcare service delivery.
11 Task Force on Medical Education for the National Rural Health Mission
12 The National Medical Journal of India Vol. 23, No. 3, 2010
13 CII KPMG Health Insurance Summit 2008 Report
14 Crisil Research Annual Hospital Review 2009
15 CII KPMG Health Insurance Summit 2008 Report
© 2010 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
© 2010 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
11 12
Implementation of public-private partnership: Case studies
Initiative Name About the Project How will it help?
Ayush Graham Bhawali Project, Nainital
• Run the project on Build -Operate-Transfer (BOT) mode
• Government will provide land measuring 10 acres to set up the Ayush Gram at Bhawali, Nainital
• Emami Limited, will be responsible for:
- Managing Out-Patient and In-Patient Departments
- Interacting with local community in growing and managing the herbal garden
- Installing a latest version of any licensed hospital management application software
- Installing a latest version of any licensed drug manufacturing unit application software
- Maintaining detailed records of medicinal plants in Herbal Garden
• Conceived by the Government of Uttarakhand, it is the first of its kind in India, to provide Ayurvedic, Unani and Homeopathy services, cultivation center for herbs and also as center for health tourism in the form of Wellness Centers
• Will also aid in maximizing service availability and reduction of operations and management cost for the government
Telemedicine initiative by Narayana Hrudayalaya in Karnataka
• With connections by satellite, this project functions in the Coronary Care Units (CCU) of selected district hospitals that are linked with Narayana Hrudayalaya hospital
• Each CCU is connected to the main hospital to facilitate investigation by specialists after ordinary doctors have examined patients
• If a patient requires an operation, s/he is referred to the main hospital in Bangalore; otherwise s/he is admitted to a CCU for consultation and treatment
• Provides access to underserved or un-served areas
• Improve access to specialty care and reduce both time and cost for rural and semi-urban patients
• Facilitate in timely diagnosis and treatment
Emergency Ambulance Services scheme in Tamil Nadu
• This scheme is part of the World Bank aided health system development project in Tamil Nadu
• Seva Nilayam has been selected as the potential non-governmental partner in the scheme
• This scheme is self-supporting through the collection of user charges
• Government supports the scheme only by supplying the vehicles
• Seva Nilayam recruits the drivers, train the staff, maintain the vehicles, operate the program and report to the government
- It bears the entire operating cost of the project including communications, equipment and medicine, and publicizing the service in the villages, particularly the telephone number of the ambulance service.
• The major cause for the high maternal mortality is a non-medical cause - the lack of adequate transport facilities to carry pregnant women to health institutions for childbirth, especially in the tribal areas
• The scheme is designed to reduce the maternal mortality rate in the rural areas of Tamil Nadu
Community Health Insurance scheme in Karnataka
• Karuna Trust in collaboration with the National Health Insurance Company and Government of Karnataka has launched a community health insurance scheme.
• It covers the Yelundur and Narasipuram Taluks
• Scheme is fully subsidized for Scheduled Castes and Scheduled Tribes who are below the poverty line and partially subsidized for non-SC/ST BPL
• Poor patients are identified by field workers and health workers who visit door-to-door to make people aware of the scheme
• Auxillary Nurse Midwives and health workers visiting a village collect its insurance premiums and deposit them in the bank
• Annual premium is INR 22, less than INR 2 a month
• If admitted to any government hospital for treatment, an insured member gets INR 100 per day during hospitalization –INR 50 for bed-charges and medicine and INR 50 as compensation for loss of wages – up to a maximum of INR 2500 within a 25-day limit
• Extra payment is possible for surgery.
• Improve access and utilization of health services, to prevent impoverishment of rural poor due to hospitalization and health related issues
• Establish insurance coverage for out-patient care by the people themselves.
Source: CII-KPMG Report on 'The Emerging Role of PPP in Indian Healthcare Sector, 2008’
© 2010 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
© 2010 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
13 14
Implementation of public-private partnership: Case studies
Initiative Name About the Project How will it help?
Ayush Graham Bhawali Project, Nainital
• Run the project on Build -Operate-Transfer (BOT) mode
• Government will provide land measuring 10 acres to set up the Ayush Gram at Bhawali, Nainital
• Emami Limited, will be responsible for:
- Managing Out-Patient and In-Patient Departments
- Interacting with local community in growing and managing the herbal garden
- Installing a latest version of any licensed hospital management application software
- Installing a latest version of any licensed drug manufacturing unit application software
- Maintaining detailed records of medicinal plants in Herbal Garden
• Conceived by the Government of Uttarakhand, it is the first of its kind in India, to provide Ayurvedic, Unani and Homeopathy services, cultivation center for herbs and also as center for health tourism in the form of Wellness Centers
• Will also aid in maximizing service availability and reduction of operations and management cost for the government
Telemedicine initiative by Narayana Hrudayalaya in Karnataka
• With connections by satellite, this project functions in the Coronary Care Units (CCU) of selected district hospitals that are linked with Narayana Hrudayalaya hospital
• Each CCU is connected to the main hospital to facilitate investigation by specialists after ordinary doctors have examined patients
• If a patient requires an operation, s/he is referred to the main hospital in Bangalore; otherwise s/he is admitted to a CCU for consultation and treatment
• Provides access to underserved or un-served areas
• Improve access to specialty care and reduce both time and cost for rural and semi-urban patients
• Facilitate in timely diagnosis and treatment
Emergency Ambulance Services scheme in Tamil Nadu
• This scheme is part of the World Bank aided health system development project in Tamil Nadu
• Seva Nilayam has been selected as the potential non-governmental partner in the scheme
• This scheme is self-supporting through the collection of user charges
• Government supports the scheme only by supplying the vehicles
• Seva Nilayam recruits the drivers, train the staff, maintain the vehicles, operate the program and report to the government
- It bears the entire operating cost of the project including communications, equipment and medicine, and publicizing the service in the villages, particularly the telephone number of the ambulance service.
• The major cause for the high maternal mortality is a non-medical cause - the lack of adequate transport facilities to carry pregnant women to health institutions for childbirth, especially in the tribal areas
• The scheme is designed to reduce the maternal mortality rate in the rural areas of Tamil Nadu
Community Health Insurance scheme in Karnataka
• Karuna Trust in collaboration with the National Health Insurance Company and Government of Karnataka has launched a community health insurance scheme.
• It covers the Yelundur and Narasipuram Taluks
• Scheme is fully subsidized for Scheduled Castes and Scheduled Tribes who are below the poverty line and partially subsidized for non-SC/ST BPL
• Poor patients are identified by field workers and health workers who visit door-to-door to make people aware of the scheme
• Auxillary Nurse Midwives and health workers visiting a village collect its insurance premiums and deposit them in the bank
• Annual premium is INR 22, less than INR 2 a month
• If admitted to any government hospital for treatment, an insured member gets INR 100 per day during hospitalization –INR 50 for bed-charges and medicine and INR 50 as compensation for loss of wages – up to a maximum of INR 2500 within a 25-day limit
• Extra payment is possible for surgery.
• Improve access and utilization of health services, to prevent impoverishment of rural poor due to hospitalization and health related issues
• Establish insurance coverage for out-patient care by the people themselves.
Source: CII-KPMG Report on 'The Emerging Role of PPP in Indian Healthcare Sector, 2008’
© 2010 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
© 2010 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
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© 2010 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated
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